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Originally Posted by dc_dux
ace...are you suggesting the recently enacted Energy Independence and Security Act of 2007 is responsible for the spike in the price crude to over $100/barrel....given that none of its provisions have been implemented yet.
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I am saying US government policy and regulations are primarily responsible for the current price of oil. If the market forces were free to move I think the price of oil would be materially lower than it is, perhaps by half.
Reasonable people know that policy and regulation has an impact on price. Certainly reasonable people can disagree on the amount of that impact.
Oil prices today reflect a premium or a discount based on anticipated future events. As you may know many blame futures traders for some of the inflated price we current see in the market. The market has priced in some of the anticipated impact of the bill. The futures market is often wrong, the premium or discount could be significantly of the mark, time will tell. Bottom line is that the price is made up of many components.
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Where was Idaho Fallz.com between 2001-2007, when the cost of gas increased by over 100% and the cost of home heating oil increased by over 125%?
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I don't know Idaho Fallz's history. I did some research and came across many sources supporting the view in the OP. I linked Idaho Fallz because they communicated the point clearly, and took a few shots at Democrats, I like that.
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IMO, the bill is the right approach....focus on increased efficiency, lower demand, investment in alternatives....with a bonus of reductions in CO2 emissions.
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Your view is shared by most people. However, my point adds something to consider. The issue of wealth distribution during our search for alternatives to oil, this is an issue worthy of discussion in my opinion - either it has been addressed and I am unaware, or we have adopted a short-sighted approach the the energy question.
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The primary reason oil is expensive is due to regulation? Explain, please.
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I don't want to give a Econ 101 lecture, but as an example if the government says that the mining of tar sands require method A and method A is more expensive than method B, the cost of the oil from tar sands will reflect the higher cost in method A.
Certainly there may be other economic benefits to method A over method B, and I am not an anarchist - there is a role for government regulation in the market. Government has a role in making determinations on the net economic costs of issues having a macro impact.
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Healthy domestic oil companies? Exxon's earnings of $10 million/hr in the 4th quarter seems pretty healthy to me. Exxon et al set new record profits with each passing quarter.
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PetroChina is the leading oil company in the world (taking the number one spot from Exxon based on market Cap.), perhaps we should start a hate campaign against PetroChina.
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Originally Posted by willravel
Why are they all continuing to post record profits? Regulation?
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Perhaps they are operating more efficiently. Profits can be a measure of explotation, but they can also be a measure of innovation. From a simplistic point of view - I bet most people today have more net income in dollars today than in the past. And we know that measure is meaningless alone.
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No one knows that for sure. If you have a room of scientists, and they all have different answers and different reasons for their answers, it's hard to be certain.
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O.k., this will be a no win issue for me. I will just say, many sources support my view - I am sure you can find some that don't.
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I'll let the results there speak for themselves, but no that wouldn't work in the US. We're too capitalist. What we need is to hold corrupt politicians and oil corporations alike accountable for conflicts of interest, bribery, and the like. Once we've weeded out the worst, things will probably be a lot better.
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I agree. Let's start with corrupt politicians. They hold the public trust. I would expect an oil company to try to influence the political process. If a politician sells-out to the highest bidder - I like the idea of tar and feathers.
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What, in you opinion, constitutes a healthy oil company? I'm curious.
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A company that makes a profit, invests in R&D, pays taxes, follow the rules and regulations in a competitive market with other healthy oil companies. Competition will regulate profits.